Which of the following statements is correct?
A)Companies will change the method of depreciating assets from one year to the next to reflect usage of an asset.
B)Companies can affect the book value at the end of an asset's life by choosing one method of depreciation over another.
C)Companies can use one method of depreciation for some of their long-lived productive assets but then use a different method for another group or type of long-lived productive assets.
D)Companies can minimize an asset's book value in the first year of use by selecting the straight-line depreciation method rather than the double-declining-balance methoD.Different depreciation methods can be chosen for various assets.

Question

Quizplus · Accepted Answer

Companies have the flexibility to use different methods of depreciation for different groups or types of long-lived productive assets. This allows them to choose a method that best reflects the usage and estimated useful life of each asset, which can result in a more accurate representation of the asset's book value.  Options A, B, and D are incorrect because they either suggest that companies change depreciation methods based on usage (which is not necessarily true), or they imply that one method of depreciation is definitively better than another (which is not always the case).

Which of the Following Statements Is Correct